Stockholm (IFN) Nordic stock exchange operator OMX AB, which recently agreed to acquire the Icelandic Stock Exchange (ICEX), on Thursday reported a 9% rise in third-quarter pretax profit on the back of higher volumes in all three business areas - market trading, information services and technology.
Pretax profit for the quarter rose to SEK227 million from SEK209 million a year ago, above analysts' expectations of SEK208 million. Net profit rose to SEK170 million from SEK151 million.
Total revenue rose to SEK817 million from SEK776 million a year earlier, also beating analysts' SEK777 million forecast. Total expenses grew to SEK592 million from SEK551 million a year earlier due to heightened market activity and the development of new products.
At 1030 GMT, OMX's share price was up SEK2.25, or 1.7%, to SEK133, outperforming a 0.1% fall in the broader index.
"The figures are above market expectations, but there aren't any major deviations anywhere," a Stockholm-based analyst said. "The information systems, which is the smallest business area, showed the best improvement, which wasn't quite expected."
OMX said it expects revenue in technology operations to increase slightly during the fourth quarter compared with the third quarter, with group expenses also "somewhat higher."
Chief Executive Magnus Boecker said that profitability of the technology operations needed to improve further and that it remains a point of focus for the company.
The tax rate for the overall group is expected to remain around the current level of 25%, Chief Financial Officer Kristina Schauman said.
"The guidance isn't very helpful, since the market was already pricing in a seasonal pickup in activity from the third quarter," the analyst said. "Especially for technology, it would be helpful to have some views on 2007."
OMX is in the midst of creating a unified Nordic bourse, having entered a deal to acquire the Iceland stock exchange, ICEX, just three weeks ago. The deal is expected to be closed by the end of November, the company said.
OMX also recently bought a 10% stake in the Oslo bourse, the only Nordic exchange not owned by OMX and which has nevertheless reaffirmed its intentions to remain independent. When asked about any further talks with the Norwegian exchange, CEO Boecker declined to comment.
OMX operates the exchanges in Sweden, Finland, Denmark, Iceland, Estonia, Lithuania and Latvia, which together form the Norex alliance and share common trading systems.
Source: Dow Jones Newswires
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